When Do You Need a CPA for Your HOA Accounting?

Have you ever served on a homeowners association (HOA) board? You probably know the work goes way beyond planning the next community get-together.  

Boards are usually neighbors who also find themselves responsible for making decisions — especially financial ones — that come with real legal weight. So, members should ask, “Should we hire a CPA, rely on accounting software, or blend both for ongoing HOA financial management?” 

Confident decision-making begins with asking the right questions about your association’s size, obligations, and risk factors. Let Ledgerly break them down, so you can figure things out. 

What Does a CPA Actually Do for HOAs? 

Bookkeepers, accountants, and CPAs get mixed up all the time, whether in HOAs or outside them. All three are important, but they serve different purposes. 

For one, a bookkeeper is your day-to-day data master. They track invoices, payments, deposits, vendor bills, and homeowner transactions, keeping the books clean and organized. Then, an accountant goes a step further. 

Accountants can do the bookkeeping and take a more analytical look at your finances. They may also assist with budgeting, tax filings, financial statements, and ensuring that all activities comply with financial rules and regulations. They translate the data into something meaningful. 

A certified public accountant (CPA) has passed a rigorous exam and maintains ongoing education. These licensed professionals bring specialized training and provide higher-level assurance through the following services: 

• Compilations 
• Reviews 
• Audits 
• Tax filings 
• Financial statements 
• Compliance guidance 

When dealing with complex tax matters, when new regulatory rules come out, and you are unsure how they apply, or when you suspect fraud, a CPA is your go-to expert. 

8 Essential Questions for Your Board’s Decision Guide 

Your board wants to stay financially sound. Fortunately, there are questions to reveal whether basic accounting is enough or whether an HOA CPA must step in. 

1. Does Your State or Your Governing Documents Require a CPA Audit, Review, or Compilation? 

If your answer is yes, you need an HOA CPA at least once a year. If your answer is no, move on to the next question. 

Do not skip the possibility of using a CPA, though! Consider their services whenever it is helpful, not just when required. 

2. What Is Your Association’s Annual Revenue? 

Many states tie CPA requirements to revenue levels. For example, Florida requires audits for associations with revenue of at least $500,000 and reviews for revenues between $300,000 and $499,999. 

If your association falls above your state’s threshold, a CPA is not optional. If you are below it, routine accounting support or a combination of HOA accounting software and bookkeeping may work. 

3. Does Your Board Have Complex Assets, Reserve Funds, or Outstanding Debts? 

If your HOA owns community buildings, keeps significant reserve funds, or carries long-term debt, keep in mind that the financial picture is more layered. As such, a CPA review or periodic CPA oversight is strongly recommended. If your finances are straightforward, bookkeeping or software can manage them. 

4. Do You Have Recurring Financial Questions, Tax Issues, or Unclear Compliance Needs? 

If you are lost in classifying certain expenses, tax rules, budget structures, or new community projects, an HOA CPA will give you clarity. The assurance from a trusted pro who has verified that you are following best practices is valuable! If none of these situations apply, however, routine accounting support is probably enough. 

5. Have You Experienced Suspected Fraud, Misappropriation, or Repeated Errors? 

Fraud happens often because a well-meaning volunteer has too much unchecked responsibility. Some sources of discrepancies are really just unreliable. If you have seen irregularities, even small ones, bring in an HOA CPA. If everything looks clean, retain your current processes. Commit to reviewing them annually to stay proactive. 

6. How Confident Is Your Board in Reading and Understanding Financial Statements? 

Not every volunteer joins the board with a financial background, and that is entirely understandable. If your board struggles to make sense of the statements you receive each month, a CPA or at least an accountant is an advantage. 

Are you already confident with your HOA financial management? Great! Software can automate the basics, allowing you to focus on governance. 

7. Is Your HOA Self-Managed or Working with a Manager or Provider? 

If you work with a management company, clarify what level of accounting they provide. Even with a manager, an HOA CPA may still be necessary for annual audits or reviews. If you are self-managed, centralized systems like HOA accounting software are a lifesaver, along with periodic CPA check-ins for added oversight. 

8. Do Homeowners Demand Higher Transparency, or Has Trust Been Undermined? 

Did you know that around 30% of the U.S. population lives in HOA communities? Houses in HOAs are worth 5% to 6% more than similar ones outside them, and typical single-family HOA fees run $200 to $300 per month. 

Comparing Your Options – At a Glance 

Here is how your main options stack up: